Last month, News18 reported that Union Minister Nitin Gadkari had assured that NHAI's financial position was in tip-top shape. (PTI file)
“…NHAI achieved a major financial milestone by successfully prepaying bank loans of Rs 15,700 crore. Early repayment of this debt is expected to save interest of approximately Rs 1,000 crore.
The National Highways Authority of India (NHAI), which comes under the Ministry of Road Transport and Highways, received revenue of Rs 15,700 crore through its Infrastructure Investment Trust (InvIT) in the financial year 2023-24, which was then used to advance bank loans, thereby helping save 1,000 crores of interest.
In an official statement issued on Tuesday, the ministry said this is an important step towards reducing NHAI's overall debt liability.
“…NHAI achieved a major financial milestone by successfully prepaying bank loans of Rs 15,700 crore. Early repayment of this debt is expected to save interest of approximately Rs 1,000 crore.
With this advance, NHAI's outstanding debt has come down to around Rs 3,200 billion.
Last month, News18 reported that Union Minister Nitin Gadkari had assured that NHAI's financial position was in tip-top shape and the agency had chalked out a plan to improve toll revenue inflows and asset monetization and The amount raised through NHAI will be used to repay the debt.
Also Read | Gadkari says funds raised through Infrastructure Investment Trust are earmarked for debt repayment of NHAI, loan reduction has begun
As per the directives of the Government of India, proceeds from InvIT monetization will be used exclusively to repay NHAI debt, the statement added.
“In FY 2024-25, NHAI intends to monetize projects worth Rs 15,000-20,000 crore through InvITs. With this, NHAI's overall debt liability is expected to further reduce to around Rs 30 trillion by the end of FY 2025.
As part of a robust debt repayment plan and to monetize proceeds from InvITs, NHAI has been actively working with lending banks to reduce interest rates.
As a result, the bank lowered interest rates from 8.00-8.10% to 7.58-7.59%. The ministry explained that in the process, Rs 157 billion of bank loans whose interest rates could not be reduced have been repaid, which will result in substantial interest savings of about Rs 10 billion.
“NHAI remains steadfast in its mission to improve the efficiency of India's national highway infrastructure. Strong asset monetization gains coupled with effective financial planning demonstrate NHAI's strong financial performance. The savings from debt reduction will be used in ongoing and future advancements plays a key role in national highway projects.
In 2014-15, NHAI's outstanding debt was Rs 23,355.66 crore. The figure increased 15 times to Rs 3,35,173.38 crore by the end of 2023-24. Ministry documents show that NHAI's outstanding debt was Rs 1,21,931.34 crore in 2017-18.
InvIT is an operational road monetization model introduced by NHAI as it has the largest share in the country's monetization pipeline. In its maiden offering, NHAI InvIT attracted two international pension funds as lead investors, the Canada Pension Plan Investment Board and the Ontario Teachers Pension Plan Board.
Stay up to date on the latest unrest in Bangladesh with our live blog.
